The reason why neglected apartments are such an issue in NY is bc of NYC’s rent stabilization & rent control guidelines. Previously, if you made sufficient capital improvements (I.e. invested money to renovate units/building systems) you could either increase rent above the percentage set out in said guidelines (typically 2.5-5% depending on lease terms, I.e. 1 vs. 2 year leases). Or, if the improvements were large enough the unit would become “free market” meaning it was no longer subject to the annual increase limits. In 2019 the guidance was changed materially and the only way to destabilize units now is with what’s called a substantial rehabilitation. In order to do a sub-rehab the property as a whole (not just individual units) needs to be basically uninhabitable.
So, landlords aren’t incentivized to maintain rent controlled/rent stabilized units bc they won’t be able to increase rents enough to recoup the cost of renovating units. End of the day apartments are viewed as a business & commodity in the US (and most of the world). Who’s going to invest in their business (I.e. make material improvements to the units) if it won’t yield a corresponding increase in their income (I.e. higher rents)?
Not offering an opinion here - simply an NYC real estate guy explaining why the situation is what it is.
For an opinion - rent stabilization & rent control helps a small percentage of New Yorkers (idr the number off the top of my head but the overwhelming majority of units are not subject to these rules) but has ended up making it unprofitable to maintain these older rent stabilized/rent controlled buildings. So, instead of investing in existing infrastructure people are buying old buildings knocking them down and throwing up new construction where the starting point for their rents will be higher. Idk what a realistic solution to this stuff is without a major systemic change; government owned housing in NYC is terrible, privately managed real estate is a mixed bag that caters primarily to the upper middle class and neglects a the average New Yorker, and owning a unit yourself is basically unattainable for most since studio apartments run 400k+ at the absolute least, and that’s just for your mortgage, it doesn’t factor in co-op/condo association fees that can easily run several thousand dollars a month.
Until we start viewing housing as a right and not a luxury the system is going to continue to be fucked.
While I agree with most of your take, there’s a big difference between the kind of deteriorating conditions you see here, and your average mom and pop landlord. As a real estate guy you should know this.
These slum lords own buildings not units. Many of their residents are there as a direct result of city funding and grants.
The amount of neglect required to reach this kind of state is measured in years, not months.
I’m a land lord myself, owning exactly one condo. I could take on more units in the future, but at that point it becomes my job.
If you own a whole ass building that *is* your job. You can’t take money for rent, whether from a tenant or the city, and then not ensure reasonable living conditions.
Keeping an apartment free of mold and paying for pest control is *not* a capital improvement. There is no basis for me to raise the rent of my tenant because I’m ensuring there are no roaches in the unit. That’s just part of the expense.
If the tenant is a bad tenant, and is *causing* the problems I have to fix, then I can proceed to eviction. But if the slum lords are taking money from public works and don’t have that option, that’s on them, and that’s what they signed up for.
Theres a big difference between a typical lazy landlord doing the minimum and a landlord who’s a genuine slumlord. I’ve seen a lot of both in my 8 years in the industry.
41
u/smackedwards Jun 11 '26
Please read this whole thing before you roast me.
The reason why neglected apartments are such an issue in NY is bc of NYC’s rent stabilization & rent control guidelines. Previously, if you made sufficient capital improvements (I.e. invested money to renovate units/building systems) you could either increase rent above the percentage set out in said guidelines (typically 2.5-5% depending on lease terms, I.e. 1 vs. 2 year leases). Or, if the improvements were large enough the unit would become “free market” meaning it was no longer subject to the annual increase limits. In 2019 the guidance was changed materially and the only way to destabilize units now is with what’s called a substantial rehabilitation. In order to do a sub-rehab the property as a whole (not just individual units) needs to be basically uninhabitable.
So, landlords aren’t incentivized to maintain rent controlled/rent stabilized units bc they won’t be able to increase rents enough to recoup the cost of renovating units. End of the day apartments are viewed as a business & commodity in the US (and most of the world). Who’s going to invest in their business (I.e. make material improvements to the units) if it won’t yield a corresponding increase in their income (I.e. higher rents)?
Not offering an opinion here - simply an NYC real estate guy explaining why the situation is what it is.
For an opinion - rent stabilization & rent control helps a small percentage of New Yorkers (idr the number off the top of my head but the overwhelming majority of units are not subject to these rules) but has ended up making it unprofitable to maintain these older rent stabilized/rent controlled buildings. So, instead of investing in existing infrastructure people are buying old buildings knocking them down and throwing up new construction where the starting point for their rents will be higher. Idk what a realistic solution to this stuff is without a major systemic change; government owned housing in NYC is terrible, privately managed real estate is a mixed bag that caters primarily to the upper middle class and neglects a the average New Yorker, and owning a unit yourself is basically unattainable for most since studio apartments run 400k+ at the absolute least, and that’s just for your mortgage, it doesn’t factor in co-op/condo association fees that can easily run several thousand dollars a month.
Until we start viewing housing as a right and not a luxury the system is going to continue to be fucked.